Google’s founders just hit a massive reset button on their business.

In a press release sent out Monday afternoon, cofounder and CEO Larry Page renamed and reorganized the company.

Google has been relegated to being a subsidiary of a company called “Alphabet”.

Alphabet will be a parent company that oversees the new initiatives Google has been launching as of late.

Larry Page will be the CEO of Alphabet. Sergey Brin, Google’s other cofounder, is the president of Alphabet.

Sundar Pichai is now CEO of Google. Pichai has been running Google since October of last year.

In the release, Page praises Pichai, saying, “It is clear to us and our board that it is time for Sundar to be CEO of Google. I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations.”

While this is a bit confusing, and overwhelming, it makes plenty of sense for Google to refashion itself.

The company has been taking bigger and bigger bets in the past few years that have very little to do with the company’s original mission of organizing the world’s information.

For instance, in July of 2013, Google announced plans to launch a company focused on curing death. That company, Calico, was going to operate as a standalone entity. Calico will be a subsidiary of Alphabet, just like Google.

In the release, Page lays out the priorities for Alphabet:

  • Getting more ambitious things done.
  • Taking the long-term view.
  • Empowering great entrepreneurs and companies to flourish.
  • Investing at the scale of the opportunities and resources we see.
  • Improving the transparency and oversight of what we’re doing.
  • Making Google even better through greater focus.
  • And hopefully… as a result of all this, improving the lives of as many people as we can.

While not mentioned in the release as potential standalones, we would think companies like Nest, Android, and YouTube could also be their own subsidiaries of Alphabet.

From an organizational perspective, it makes sense for Page to oversee a half dozen independently running businesses and offer his guidance and direction where possible.

Page was no longer interested in the nitty-gritty of running a business like Google. He wasn’t going to be in meetings talking about increasing the cost per click. He wasn’t going to get geeked over iterative changes to Gmail. He wants big fat honking changes to happen. This is the best way to do that while keeping Google humming.

Originally posted: Google just announced a massive overhaul of its business structure